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Improvements in compliance programs according to the OECD

August 08, 2023

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Founded in 1961 and headquartered in Paris, the Organisation for Economic Co-operation and Development (OECD) economic organization composed of 38 member countries. Its goal is to stimulate global economic progress and facilitate world trade.

Currently, the following countries are OECD members: Germany, Australia, Austria, Belgium, Canada, Chile, Colombia, South Korea, Costa Rica, Denmark, Slovakia, Slovenia, Spain, United States, Estonia, Finland, France, Greece, Netherlands, Hungary, Ireland, Iceland, Israel, Italy, Japan, Latvia, Lithuania, Luxembourg, Mexico, Norway, New Zealand, Poland, Portugal, United Kingdom, Czech Republic, Sweden, Switzerland, and Turkey.

Brazil notably is not part of this select group, although political reasons are an important variable that still prevent its entry. However, the OECD establishes guidelines to be followed by member countries. This, in turn, encourages similar standards to be required of those with whom they do business.

The OECD published the 2021 Anti-Bribery Recommendation to improve the fight against bribery of foreign public officials in international commercial transactions. In summary, the following highlights are listed below:

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HIGHLIGHTS FROM THE 2021 OECD ANTI-CORRUPTION RECOMMENDATION

1. Require that member countries encourage the development of compliance programs, both in the context of its application and in the participation of companies in government purchases or when receiving other public benefits.

2. Require a level playing field between state-owned companies and private companies, subjecting state-owned companies to the same compliance expectations and standards than private ones.

3. Ask countries to remove obstacles to effective due diligence and other compliance practices presented by data protection regimes.

4. Emphasis on accounting standards and internal auditing.

5. Encourage reporting and protection of whistleblowers.

6. Improve and update OECD guidance on internal controls, ethics and compliance, guidelines which influence standards imposed by the United States and other law enforcement authorities in countries that participate in the OECD and are party to the Anti-Bribery Convention.

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The document titled Annex II –  Good Practice Guidance on Internal Controls, Ethics and Compliance focuses on companies, business organizations, and professional associations. It is divided into two distinct sections and has been substantially updated, as can be seen in the table below:

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                   TOPIC                

           		               

                   IMPROVEMENTS MADE     TO ANNEX II                

           
               

                   Commitment with Compliance                

           		               

                   A.1.    – There must be unconditional support and commitment                    from the board or    corresponding managers (in addition to                    the general manager),view to    implementing a culture of                    ethics and compliance.                

               

                   A.16.    – Establish a new expectation in the external                    communication of the company's    commitment with                    compliance.                

           
               

                   Policies and Procedures                

           		               

                   A.2.    – Recommend that companies' anti-corruption policies                    must be easily    accessible to employees, relevant third                    parties, and subsidiaries and should    be translated into                    the language of the country, where necessary.                

               

                   A.5.    – Expands the list of areas that must be covered by                    the compliance policies    and procedures: conflicts of                    interest, recruitment and selection processes,    risks                    associated with the use of third parties, and clear                    processes for    participating in bidding processes.                

           
               

                   Internal Monitoring and Autonomy                

           		               

                   A.4.    – Emphasizes that compliance officers responsible                    for monitoring compliance    programs must have an                    appropriate level of experience and qualifications, as                    well as access to relevant data sources.                

           
               

                   Relationship with Third Parties                

           		               

                   A.6.    – (i) there must be continuous third-party                    monitoring, (ii) adds a new    element with respect to                    mechanisms to ensure that contract terms describe in                    detail the services to be provided, which payment terms are                    appropriate, that    the object of the contract is                    effectively performed, and the payments, in    return, are                    made, (iii) adds a new element to ensure the company's right                    to    audit third parties and to effectively exercise said                    right, and (iv) adds a    new element with respect to the                    establishment of adequate mechanisms to    address                    corruption incidents abroad by contracted third parties, for                    example,    termination of contract.                

           
               

                   Internal    Reporting, Investigation, and Remediation                

           		               

                   A.8.    – Adds a new element with regard to internal                    controls to identify patterns    that indicate corruption                    abroad, including the use of innovative    technologies.                

               

                   A.11.    – Recommends that measures to address suspected                    corruption cases abroad must    also include (i) processes                    to identify, investigate, and report misconduct    and                    effectively utilize the necessary resources to enforce the                    law and (ii)    remediation (including analysis of the                    situation giving rise to the issue and    identified                    weaknesses).                

               

                   A.13.    – Clarifies that internal reporting mechanisms must                    be confidential,    anonymity being possible, and provide                    visible and accessible channels for    reporting misconduct.                

           
               

                   Training                

           		               

                   A.9.    – Adds a new element aimed at ensuring documented                    and periodic training for    third parties regarding the                    company's compliance and anti-bribery program.                

               

                   A.12.    and A.13. – Adds new expectations to ensure that                    whistleblowers do not suffer    retaliations.                

           
               

                   Incentives and Disciplinary Measures                

           		               

                   A.10.    – Encourages appropriate incentives for meeting                    compliance standards,    including ethics and compliance in                    human resources processes.                

               

                   A.11.    – Clarifies that disciplinary measures must be                    consistent, appropriate, and    properly communicated to                    ensure employee awareness.                

           
               

                   Periodic    Reviews, Monitoring, and Testing                

           		               

                   A.14.    – Clarifies that periodic tests and reviews must be                    regularly conducted and    target specific developments,                    operational, and structural changes, monitoring    and                    auditing results and “lessons learned” from potential                    misconduct    occurring in the company itself, as well as                    from other companies facing    similar risks.                

           
               

                   Mergers and acquisitions                

           		               

                   A.15.    – Adds a new element providing for the absolute                    necessity of  risk-based due diligences prior to mergers                    and acquisitions, and incorporation of the new company into                    the compliance    program and internal controls, carrying                    out all necessary training and    audits.                

           

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It is important to note that all recommendations will be observed within the monitoring program carried out by the OECD Anti-Bribery Working Group.

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